In “Tesco’s Downfall Is a Warning to Data-Driven Retailers,” Michael Schrage links Tesco’s problems to a reliance on research and analytics. He suggested that they are no match for a strategy of slightly lower prices in the retail environment.
He says we should be getting nervous and asking hard questions about the efficacy of customer data and insight. He is exactly right that Tesco executives should be asking hard questions. But the question shouldn’t be “why did we rely on data and analytics?” The question should be “why did we fail to use the data and analytics to craft a viable strategy?”
The lesson here for Tesco – and marketers everywhere – isn’t that data and analytics are a losing strategy; it is that data and analytics aren’t a strategy at all.
The evolution of marketing into a much more quantitative discipline has been a good thing in my view. The vast quantity of data available and the tools being created to explore it are promising advances.
But data is not insight. The analytic outputs of all the cool new software that crunches the data are not insight. Insight is understanding what the data says and making connections between disparate items.
Data and analytics have no value at all until someone does the hard work of creating insights and crafting a business strategy based on the understanding gained.
The cautionary tale for marketers here is that the data and analytics tools sold into enterprises are just that. Tools. Not solutions; not strategy; not competitive advantage. These things only come from doing the hard work of using the tools to understand the world and building a plan from that understanding.
Confusion on that point is a recipe for disaster.